Market Update.

This is a chart of the S&P Spyder ETF {SPY}. You can double click on it to make it larger.The chart was generated around 1:45 PM Chicago time. The actual market close looks just slightly different. The conclusions are the same. Stocks experienced a massive world-wide sell off in the past 24 hours based on a third explosion at the stricken Japanese reactors outside of Sendai and subsequent fears of further radiation release and a possible meltdown of the reactor cores. Japanese stocks have now experienced their worst two day drubbing since 1987.

US stocks plunged on the open today in sympathy with the rest of the world but pared the worst of their losses on more evenhanded analysis about the worst case scenario with the reactors news that technicians were making progress in stabilizing the reactors and a Federal Reserve announcement coming out of their latest meeting that economic conditions here were improving.

I will take a guess here that unless the news out of Japan tonight continues to worsen, then in the very short term stocks should experience some sort of reflex rally. How high and for what length of time I don't pretend to know. However it strikes me that we came down too quick on news of an exogenous event that doesn't materially impact our economy except for some very short term dislocations. The question is going to be how do stocks react in the longer frame. I'd hoped to be able to put all this together today but time and the markets conspired against me. I'll publish my thoughts on markets going forward in the morning.

*Long ETFs related to the S&P 500 in client and personal accounts.